The value of heading east: Why Ottawa firms are going back to China

Mark Brownlee
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The plane ride stretches on for hours and hours. You spend a week churning through unfamiliar territory in a foreign land. And, to top it all off, you’re forced to miss Thanksgiving back home.

Ottawa Mayor Jim Watson meets with Beijing Mayor Guo Jinlong (file photo). (Photo supplied)

Why, you ask, would anyone want to make that trip?

To Bruce Lazenby, the president and CEO of the city’s economic development arm Invest Ottawa, any drawbacks to joining him and other city officials on a trip to China pale in comparison with the potential benefits for the right companies.

“China will soon be the purchaser of everything,” he said. “It’s a massive market that most Canadian companies don’t understand how to get to, especially small businesses.”

Mr. Lazenby joined several other local companies, Ottawa Mayor Jim Watson and officials from business organizations such as Ottawa Tourism this past weekend for the start of a weeklong trip the city is billing as its largest mission to China.

During that time, the group will tour different regions of China, creating a general awareness about Ottawa’s strengths as a place to do business while matching up local firms participating in the trip with potential clients and investors.

If all goes well, they’ll be busy spending most of the time signing agreements.

Mr. Watson visited China in the late 1990s when he was mayor of pre-amalgamation Ottawa, signing a sister city agreement with Beijing, and returned during his current term in 2011. During the latter trip, Ottawa Tourism signed a memorandum of understanding with the Beijing Municipal Commission of Tourism to promote travel between the two cities.

There are numerous benefits to making the trip, Mr. Lazenby said.

Mayors are well-respected in China, meaning Mr. Watson will open doors to executives that otherwise wouldn’t have been within reach.

He also tries to encourage high-growth companies that either have a product that would be of interest to Chinese companies or are in the market for investment to make the trip.

It’s not for everyone, however.

Invest Ottawa regularly hears from firms that wouldn’t be a good fit for the delegation, Mr. Lazenby said.

“If there’s a very small company that doesn’t have a lot of money, we might suggest to them that spending $5,000 might not be the best thing and they should focus on local markets,” he said.

Other businesses that Mr. Lazenby believes would be candidates resist his overtures because the timing is not ideal or they just don’t see the potential benefit of expanding into Chinese markets.

Business organizations that have made the trip, though, are already convinced that it’s well worth missing Thanksgiving turkey.

Noel Buckley, the president and CEO of Ottawa Tourism, said every area of Canada is making more of an effort to bring Chinese visitors to their cities.

Despite being Canada’s capital, Ottawa lacks direct flights to and from Beijing, unlike Toronto and Vancouver.

That’s why he believes Ottawa needs to make the extra effort so that when people travel from China, they also make sure to have the nation’s capital on their list of places to see.

“We don’t want to begin losing market share as a country, but we also don’t want to begin losing market share as a city or a destination within the country,” said Mr. Buckley, who will be taking part in the trip.

“It would be in Ottawa’s best interest to continue to ensure that we maintain … Ottawa’s fair share of visitors to Canada.”

Sidebar one: Asian expenses

How much does it cost to make the trip to China?

The city has budgeted $30,000 for members of its delegation, according to Ryan Kennery, the mayor’s spokesperson. That doesn’t include the costs for Invest Ottawa. Local businesses and other organizations are expected to pay their own way.

“Costs are being kept to a minimum, and corporate and registration fees are helping further reduce costs,” he wrote in an e-mail.

Bruce Lazenby, the president and CEO of Invest Ottawa, didn’t say how much the trip was going to cost his organization.

There are also other indirect costs related to the city’s efforts to boost business ties in China.

Municipal records show that in the third quarter of 2011, Canada China Business Consulting – a boutique Ottawa-based firm specializing in facilitating government and business relationships – received a $25,440 contract for “consulting services for the Ottawa-Beijing/China relations.” The same firm received a $10,990 contract in the second quarter of 2012 for “consulting services to support and develop the Sister City Relationships between Ottawa and Beijing.”

In the case of both contracts, records state that Canada China Business Consulting was deemed to be the only acceptable and cost-effective vendor.

The firm is run by Joan Sun, whose LinkedIn profile describes her as the senior adviser of China relations for two consecutive Ottawa mayors.

Sidebar two: Chinese incubator update

Nearly a year has passed since the ratification of one of the partnerships that Invest Ottawa believes the municipality’s frequent trips to China helped spawn.

Last December, Invest Ottawa announced that Zhongguancun Development Group, a state-owned enterprise founded by the municipal government of Beijing, was going to set up a local incubator in the capital.

It was designed to give local companies the chance to develop their products for sale in China.

ZDG has yet to invest in any local firms, but Bruce Lazenby, Invest Ottawa’s president and CEO, believes the group is getting close.

“What we started doing was understanding the types of companies they were interested in investing in,” he said. “We’ve been combing through Ottawa companies that we think meet that requirement.”

Invest Ottawa has presented about 30 companies to the Chinese officials, he said.

ZDG then identified four of those as firms in which they might be interested. However, he declined to reveal which companies those are.

Organizations: Ottawa Tourism, Beijing Municipal Commission of Tourism, Zhongguancun Development Group Canada China Business Consulting

Geographic location: Ottawa, China, Beijing Canada Toronto Vancouver

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